Didn't we see the same thing with DVD players, though, where some features were mandatory and others weren't?
When you have a format, you generally have mandatory requirements on players, and you sometimes have optional features. On DVD, Dolby Digital 5.1 was mandatory, but DTS 5.1 was optional. But that meant that when you published a title, you never really knew how many customers had players that supported the feature you were adding to the disc at some cost. On HD DVD, the mandatory audio technologies are Dolby Digital, Dolby Digital Plus, and Dolby TrueHD. [For more details, see an explanation of the differences among the various Dolby technologies.]
Over time, though, DTS became a de facto standard on DVD players. Don't you expect to see the same thing happen over time with Blu-ray's specs, such as the requirements for storage and interactivity via an ethernet connection? [Paramount's decision comes ahead of Blu-ray's new minimum specs, which go into effect for players sold after October 31.]
Eventually, that's true, but right now we have early adopters and enthusiasts [buying players]. If you do migrate the spec and your options are not included on the early players, these are the very people you leave behind. They're our most valuable customers in launching a new format, and you want to make sure that what they buy continues to represent the best of the format.
What about the additional capacity of Blu-ray, which has 50GB dual-layer discs, as opposed to HD DVD's 30GB dual-layer discs? Some studios have cited the additional capacity as necessary. Are you going to miss having the extra headroom?
This is a little bit overrated. Making a choice like the one Paramount has made is a multifaceted choice: It depends upon manufacturability, the reliability of players, the cost, the infrastructure that's developed to support our creation of titles. Many different factors came into play - including capacity. When Paramount made this decision, we considered the broad spectrum.
If everything else were equal, more capacity would be better. Why not?
But if you convert the playing time, a 30GB disc gives you somewhere between 3 and 4 hours of capacity. It depends upon the nature of the movie and how you compress it. There's no compromise on the quality. We've found that 95 percent of movies are less than 2.25 hours long. With a disc whose capacity is 3 or 4 hours, you can put a fair amount of bonus material on that disc as well. So 30GB with the option to add another disc is fine, from our point of view.
What if the multiple soundtracks and high-definition bonus materials won't fit on a single disc?
If there's an overflow of bonus material, we'll just go to another disc. That's not an issue for consumers. In some cases, they consider that it has more value. It's done routinely in DVD. Why put every single title on a high-capacity disc if it doesn't need it?
Do you expect capacity needs to change in the future?
A 45GB disc is under development. [Editors' note: This disc has been in development for two years.] Secondly, compression will become more effective. The number of minutes you get on a disc depends upon how much you can compress a movie. As we gain experience with the new codecs, the ability to compress at high quality will be improved.
Capacity is a factor, but it's not an overriding factor. In the grand scheme of things, the better proposition for consumers in our view, and for our business needs, is HD DVD.